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WILLIAM  GIBBS  McADOO 
The  liberty  loan 


65tii  Congress  )  SENATE  •[  I^o<^"^"^''<f 

Ist  Session      )  \    No.  40 


THE  LIBERTY  LOAN 


ADDRESS 

OF 

HON.  W.  G.  McADOO 

SECRETARY  OF  THE  TREASURY 

DELIVERED  AT  A  MEETING  OF  BUSINESS  MEN  AND 
BANKERS  OF  IOWA 

IN  DES  MOINES,  MAY  21,  1917 


n\&. 


^ 


PRESENTED  BY  MR.  SMOOT 
May   31,    1917. — Ordered  to  be  printed 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1917 


THE  LIBERTY  LOAN. 


All  address  bj'  Hon.  W.  (i.  McAdoo,  Socretaiy  of  the  Treasury,  delivered  at  a 
lueetiiig  of  business  men  aud  bankers  of  Iowa,  in  Des  Moines,  Slay  21,  1017. 


Mr.  Chaiiinuu  and  fellow  citizens,  I  am  delighted  to  be  here  to 
join  you  in  a  discussion  of  the  very  vital  problems  before  the  coun- 
try. I  am  particularly  glad  because  it  is  the  first  time  that  I  have 
ever  had  an  opportunity  to  stop  upon  the  soil  of  Iowa  and  meet  some 
of  its  representative  men  face  to  face.  I  am  always  pleased  when 
I  come  to  the  West — and  I  do  not  say  this  in  the  language  of  idle 
compliment;  I  say  it  because  I  mean  it,  because  I  like  the  spirit  of 
the  West.  There  is  something  in  your  handshake  that  means  sin- 
cerity and  friendship;  it  means  vigor;  it  means  that  sturdy  Ameri- 
canism, that  courage,  and  that  valor  which  are  essential  now  if  you 
are  going  to  carry  your  country  through  the  perils  that  confront  it. 

THE  nation's  CHIEI'  DANCER. 

And  so  it  is,  my  friends,  that  I  am  glad  to  be  here  and  to  talk 
to  you  about  matters  that  concern  your  very  lives  and  the  future 
of  your  country ;  more  than  that,  that  concern  the  ver.y  foundations 
of  the  civilized  world,  because  it  would  be  impossible  for  a  truthful 
man  to  exaggerate  the  gravity  of  the  situation  which  now  confronts 
the  civilized  world. 

In  all  democracies  there  is  one  serious  defect,  and  that  is  the 
diiliculty  of  arousing  the  people  promptly  in  cases  of  emergency 
to  the  dangers  of  the  situation.  The  chief  danger  confronting  us 
to-day  is  the  fact  that  in  this  great  Republic  of  100,000,000  population 
it  may  be  difficult  to  get  the  people  aroused  quickly  enough  to  enable 
them  to  strike  the  initial  blows  effectively  enough  to  end  this  war  as 
quickly  as  it  ought  to  be  ended  and  as  it  can  be  ended  if  the  right 
sort  of  organization  can  be  efl'ected.  I  have  left  AVashington  at 
this  time,  Avhen  my  shoulders  are  tremendously  overloaded  and  when 
I  am  needed  there  on  other  grave  and  pressing  problems  in  the 
Treasury  Department,  to  meet  some  of  the  American  i:>eople  face 
to  face  and  to  attempt  to  tell  them  some  of  the  things  they  ought 
to  know  if  they  do  not  already  know  them.  I  am  going  to  talk  to 
you  perfectly  frankly  about  the  situation. 

WAR   T  XAVOIDABLE. 

In  the  first  place,  gentlemen,  let  it  be  understood  now  that  this  war 
was  just  as  unescapable  for  the  American  people  as  it  is  to  escape  the 
rising  of  to-morrow's  sun.    Your  great  President,  at  whose  side  I  have 

3 


4  THE   LIBERTY   LOAN. 

had  the  privilege  and  the  honor  of  serving  for  the  past  four  years, 
has  done  everything  that  mortal  man  could  do  to  keep  this  country 
honorably  at  peace.  I  know  how  his  soul  has  been  wrung  with  the  very 
anguish  of  the  man  whose  whole  thought  was  of  humanity  when  he 
has  had  to  face  the  terrible  problem  of  leading  this  peaceful  Nation 
into  war.  But  there  is  a  power  above  that  of  any  human  being, 
v.'ach,  in  these  momentous  crises  that  arise  from  time  to  time  in  the 
world's  life,  directs  action  and  against  which  fallible  man  is  power- 
less to  assert  himself.  This  is  one  of  those  crises.  AVe  are  in  the 
midst  of  one  of  those  great  upheavals  of  civilization,  one  of  those 
cataclysmic  times  out  of  whicli  great  events  are  born,  great  events 
that  are  going  to  profoundly  aflect  the  whole  future  of  the  human 
race  for  centuries,  perhaps;  and  it  is  because  the  omnipotent  God 
has  seen  in  this  country  the  greatest  leader  of  democracy,  the  greatest 
champion  of  liberty  in  the  civilized  world,  the  instrument  to  restore 
to  suffering  humanity  the  blessings  of  peace — stable  peace  based 
upon  justice  through  the  destruction  of  military  autocrac}'— that  wc 
find  ourselves  forced  into  this  struggle. 

Whatever  the  differences  of  opinion  may  have  been  about  peace  or 
war  heretofore — and  I  am  quite  sure  that  there  were  honest  differ- 
ences of  opinion  as  to  whether  or  not  America  should  have  entered 
this  war — I  am  perfectly  willing  to  respect  the  opinions  of  the  men 
who  thought  differently  from  me  upon  that  great  issue — this  is  no 
time  to  talk  about  that.  The  die  has  been  cast,  the  representatives  of 
the  people  of  the  United  States,  after  being  informed  by  your 
President  of  the  situation,  have,  by  almost  imanimous  vote,  said 
that  America  must  go  into  this  fight.  Now  that  she  is  in  this  fight, 
her  duty  to  God,  to  herself,  and  to  humanity  is  to  Avin  as  quickly 
as  possible  in  order  to  stop  this  horrible  slaughter  upon  the  battle 
fields  of  Europe  that  threatens  to  destroy  the  very  soul  of  the  civil- 
ized world.  We  are  just  as  much  interested,  my  friends,  in  stopping 
the  slaughter  of  Germans  as  we  are  in  stopping  the  slaughter  of 
Englishmen  and  Frenchmen  and  Serbians  and  Belgians  and  Rus- 
sians and  Italians.  We  are  just  as  much  interested  in  stopping  the 
slaughter  of  every  human  being  as  we  are  in  stopping  the  slaughter 
of  Americans.  But  let  me  say  here  that  in  this  great  service  to  Avhich 
God  has  called  us,  to  which  the  voice  of  stricken  humanity  cries  out, 
if  it  be  necessary  to  drain  the  last  drop  of  American  blood  from  the 
veins  of  every  freeman  in  this  country  in  order  that  civilization  may 
be  reestablished  upon  the  bases  of  stable  peace  and  justice  in  the 
world,  we  must  be  prepared  to  make  that  sacrifice. 

OUR  FOE GERMAN   MILITARY  AUTOCRACY.        "^ 

What  are  we  fighting?  We  are  not  fighting  the  German  people. 
My  friends,  this  is  the  most  extraordinary  war  of  all  time.  Here 
we  find  ourselves,  a  great  people,  without  eimiity  or  hostility  to  an- 
other great  people,  engaged  in  a  war  with  them.  We  are  not  fight- 
ing the  German  people;  we  are  fighting  the  German  military  au- 
tocracy which  is  trying  to  enslave  the  world,  America  in  the  bargain. 
And  once  we  succeed  in  the  destruction  of  that  military  autocracy, 
self -governed  peoples  may  in  the  future  rest  in  security,  because,  my 
friends,  do  you  realize  that  the  one  grave  menace  to  the  peace  of 
the  vsorkl  for  tlie  last  40  j'ears  has  been  the  military  autocracy  of 


THE   LIBERTY   LOAN.  ~  5 

Germany?  AVe  are  striving  for  the  destruction  of  that  autocracy, 
not  onl}'  to  save  America  for  the  future,  but  we  are.  stranj2e  as  it 
may  seem,  fighting  in  order  that  the  (Jerman  people  may  be  dis- 
enshived.  We  are  trying  to  hel])  them  get  self-govornment  in  order 
that  they  may  in  the  future  be  able  to  enjoy  tho  same  bh'ssings  that 
the  i)eople  of  this  great  Kepublic  have  enjoyed,  that  they  may  shake 
off  the  shackles  of  "this  military  system  which  has  enslaved  them 
all  these  years.  When  that  is  accomplished,  and  we  have  succeeded, 
as  I  pray  God  that  we  may,  in  extending  self-government  to  all  the 
responsiljle  peoples  of  the  world,  then  and  then  (mly,  my  friends, 
have  you  got  the  guaranties  of  that  stable  peace  which  is  founded 
upon  justice;  and  unless  peace  is  founded  upon  justice  you  will 
never  have  stable  peace  in  this  world.  ' ' 

Do  3'ou  realize  how  profoundly  the  ideals  of  this  great  Republic 
have  moved  the  world  in  the  last  five  years?  Do  you  realize  that 
the  greatest,  in  one  sense,  of  all  autocracies  in  the  matter  of  sovereign 
power — that  is,  the  despotic  power  of  the  sovereign,  has  crumbled 
by  the  very  example  of  this  great  Republic  ?  I  speak  of  the  Chinese 
Empire,  which  is  now  one  of  the  great  Republics,  and  whose  success 
and  whose  power  to  sustain  itself  to-day  rests  largely  upon  the 
friendship  of  this  great  Xation.  We  have  been  able  to  extend  sub- 
stantial friendship,  I  am  glad  to  say,  in  ever}'  manner  that  it  was 
possible  for  us  to  extend  it.  We  were  among  the  first  of  the  great 
nations  of  the  earth  to  recognize  the  Chinese  Republic. 

Since  this  war  broke  out,  another  powerful  military  autocracy  has 
disappeared,  and  upon  its  ruins  has  been  established  another  great 
republic,  Russia,  to  whose  people  we  have  just  extended  recognition 
and  the  right  hand  of  fellowship,  and  to  whom  I  have,  in  the  exer- 
cise of  the  powers  conferred  upon  me  by  the  Congress,  just  extended 
a  credit  of  $100,000,000.  We  want  them  to  understand  that  America's 
professions  of  friendship  and  support  are  not  lip  service,  but  that 
Ave  intend  to  put  behind  every  nation  fighting  with  us  for  the  cause 
of  liberty  throughout  the  world  what  Congress,  in  its  resolution  de- 
claring a  state  of  war  between  Germany  and  the  United  States, 
expressed  in  this  noble  language:  "We  pledge  the  entire  resources 
of  the  people  of  the  United  States  for  this  great  object." 

AVOIJLD  DOMINION,  THE  KAISER's  AIM. 

There  is  one  remaining  military  autocracy  left,  a  military  autoc- 
racy the  like  of  which  the  world  has  never  known,  headed  by  an 
autocrat  of  limitless  and  lustful  ambition,  whose  covetous  eyes  rest 
upon  the  whole  world.  His  purpose  to-day  is  world  dominion. 
Never  since  the  days  of  Alexander  the  Great  has  such  an  auda- 
cious scheme  of  world  conquest  been  deliberately  conceived  and  re- 
morselessly organized  by  any  nation.  That  is  the  thing  that  threat- 
ens the  liberties  of  mankind;  that  is  the  thing  that  makes  it  neces- 
sary for  America  to  get  into  this  fight  as  the  champion  of  liberty 
throughout  the  world,  and  to  see  that  that  colossal  crime,  as  it  would 
be  if  successful,  is  not  perpetrated  upon  the  human  race. 

WE  ARE  FIGHTING  IN  LIBERTY'S  CAUSE. 

I  like  to  feel,  my  friends,  when  T  think  about  this  war,  that  it  is 
the  only  kind  of  a  war  in  which  this  great  Republic  could  afford  to, 
engage.    We  would  not  go  into  any  war  for  material  ends.  We  would 


6  THE   LIBERTY   LOAN. 

not  lift  a  finger  to  take  one  square  inch  of  the  soil  of  an^  other  nation 
upon  the  face  of  the  earth.  We  do  not  seek  to  make  subject  any  other 
races  upon  the  face  of  the  earth.  We  do  not  want  any  indemnities  or 
any  compensation  for  Avhat  we  do  in  this  war.  We  are  fighting  for  an 
ideal,  which  is  the  only  thing  that  makes  any  nation  great,  whether 
it  has  material  resources  or  not,  because  any  nation  with  material 
resources  and  no  ideals  will  in  time  become  the  prey  of  the  conqueror. 
We  do  not  intend  to  be  drawn  at  the  chariot  wheels  of  any  military 
autocrat,  as  poor,  stricken,  bleeding  Belgium  has  been  for  the  past 
three  years,  and  as  horribly  devastated  Serbia  has  been  for  the  same 
time.  We  intend  to  assert  the  power  of  free  America  with  such  effect 
upon  these  battle  fronts  in  Europe  that  it  won't  be  long  before  the 
slaughter  of  all  kinds  of  human  beings  will  be  stopped.  And  when 
America  sits  at  that  council  table  of  peace — and  that  is  one  of  the 
things  about  this  war  that  is  such  a  noble  and  inspiring  thing,  a 
thing  upon  w'hich  I  like  to  let  my  imagination  dwell — when  America 
sits  at  that  council  of  the  great  nations  she  must  bear  upon  her  brow 
the  crown  of  justice,  the  crown  of  disinterestedness,  and  in  her  eyes 
must  shine  the  clear  light  of  liberty  and  love  for  humanity :  slie  must 
seek  nothing  for  herself ;  she  must  use  her  benevolent  powers  for  the 
purpose  of  seeing  that  even  as  between  these  belligerents,  enemies 
and  friends  alike,  justice  is  done;  that  the  bases  of  peace  shall  be 
founded  upon  a  fair  adjustment  of  all  of  the  complex  questions  in- 
volved ;  that  no  cancerous  sores  shall  be  left  to  fester  and  disturb  the 
peace  of  the  world  in  the  future;  that  all  may  have  the  assurance 
that,  because  the  treaty  is  based  upon  justice,  the  new  peace  may  for 
centuries  survive  with  pregnant  blessings  to  mankind ! 

THE  FIRST  NECESSITY — MONET. 

That  is  the  problem  now.  What  must  America  do  to  meet  it? 
Wars  can  not  be  fought  without  mone3\  The  very  first  step  in  this 
war,  the  most  effective  step  that  we  could  take,  was  to  pix)vide  the 
money  for  its  conduct.  The  Congress  quickly  passed  an  act  author- 
izing a  credit  of  $5,000,000,000,  and  empowered  the  Secretary  of 
the  Treasury,  with  the  approval  of'  the  President,  to  extend  to  the 
I'.llied  Governments  making  war  Avitli  us  against  the  enemies  of  our 
country,  credits  not  exceeding  $3,000,000,000.  Since  that  law  was 
passed — it  was  only  passed  on  the  24th  of  April,  less  than  a  month 
ago — the  financial  machinery  of  your  Government  has  been  speeded 
up  to  top  notch  to  give  relief  to  the  allies  in  Europe,  in  order 
that  thej'^  might  be  able  to  make  their  units  in  the  trenches,  their 
machinery  which  is  there  on  the  ground,  tell  to  the  utmost,  and  teU. 
if  possible,  so  effectively  that  it  might  not  be  necessary  to  send 
American  soldiers  to  the  battle  fields.  As  a  result,  we  have  already 
extended  in  credits  to  these  Governments — Great  Britain,  France, 
Italy,  Russia,  and  Belgium — something  like  $745,000,000,  and  we 
shall  have  to  extend  before  this  year  is  out,  if  the  war  lasts  that  long, 
not  $3,000,000,000  of  credits,  but  probably  five  billions  or  six  billions. 
But  it  makes  no  difference  how  much  credit  we  extend,  we  are 
extending  it  for  a  service  which  is  essential,  as  I  said  before,  for 
your  own  protection,  if  no  other  grave  issues  were  involved  in  this 
struggle. 


THE   LIBERTY    LOAN.  7 

This  initial  financing  was  not  an  easy  tiling  to  do.  The  Con- 
gress authorized  tlie  Secretary  of  the  Treasury  to  issue,  in  addition 
to  bonds,  $2,000,000,000  of  one-year  debt  certificates.  Their  pur- 
pose is  to  bridge  over  any  chasms,  so  to  speak,  so  that  if  the  Treas- 
ury is  short  at  any  time,  because  of  extraordinary  demands,  we  can 
sell  these  temporary  certificates,  supply  tlie  need,  and  then  sell  bonds 
to  take  up  these  certificates.  We  have  been  selling  (cuii)orary  debt 
certificates  in  anticii)atiou  of  the  sale  of  these  Lil)erty  bonds..  The 
first  issue  of  bonds — $'2.0()0,00(),000 — has  not  been  determined  by  any 
arbitrai'v  decision  or  judgment;  it  has  been  determined  by  the  actual 
necessities  of  the  situation.  It  is  the  least  jjossiblc  sum  that  we  can 
afford  to  provide  for  the  immediate  conduct  of  the  war.  AVe  are 
trying  to  spread  the  payment  for  the  bonds  over  as  large  a  period 
as  possible,  so  that  there  shall  be  no  financial  disturbance,  and  we  are 
going  to  redeposit  tlie  proceeds  in  the  banks  upon  some  equitable 
plan  so  that  there  shall  be  no  interference  with  business.  This  money 
is  not  going  to  be  taken  out  of  the  countiy.  All  of  this  financing  is 
largely  a  matter  of  shifting  credits;  it  is  not  going  to  involve  any 
loss  of  gold;  it  is  not  going  to  involve  any  loss  of  values.  These 
moneys  are  going  to  be  put  back  into  circulation,  put  back  promptly 
into  the  channels  of  business  and  circulated  and  recirculated  to  take 
care  .of  the  abnormal  prosperity  of  the  country,  a.  prosperity  that 
will  be  greater  in  the  present  year  than  ever  before  in  our  history. 
As  we  sell  these  bonds  we  take  back  from  the  foreign  governments, 
under  the  terms  of  the  act,  their  obligations,  having  practically  the 
same  maturity  as  ours,  bearing  the  same  rate  of  interest  as  ours,  so 
that  as  their  obligations  mature  the  proceeds  will  be  employed  to  pay 
off  the  obligations  issued  by  this  (Tovernment  to  provide  them  with 
credit.  So  you  can  see,  fellow  citizens,  that  in  extending  credit  to 
our  allies  we  are  not  giving  anything  to  them.  So  far  as  that  is  con- 
cerned, for  the  purposes  of  this  war,  I  would  be  willing  to  give  them 
anything  to  gain  success,  but  they  don't  ask  that.  They  are  glad  and 
grateful  that  the  American  Government  is  willing  to  give  them  the 
benefit  of  its  matchless  credit,  a  credit  greater  and  stronger  than  any 
nation  on  the  face  of  the  globe.  We  give  them  credit  at  the  same 
price  our  Government  has  to  pay  to  you,  its  people,  for  the  use  of  the 
money,  because  we  do  not  want  to  make  any  profit  on  our  allies.  We 
do  not  want  to  profit  by  the  blood  that  they  must  shed  upon  the 
battle  field  in  the  same  cause  in  which  we  are  engaged. 

THE  LIBERTY  LOAN  MUST  BF^  A  SUCCESS.      ' 

What  can  you  do  to  make  this  loan  a  success?  You  lunc  goi  to 
work,  gentleman,  to  make  this  loan  a  success.  America  never  before 
was  offered  a  $2,000,000,000  issue  of  bonds.  This  Government  never 
has  had  to  borrow  so  much  money  at  one  time.  The  money  is  in  the 
country  and  can  be  had  if  you  men  will  simply  say  that  the  (tov- 
ernment  can  have  it.  The  annual  increase  of  our  we^ilth  is  estimated 
to  be  fift}^  billions  of  dollars.  You  are  asked  not  to  give  anything 
to  your  Government,  but  merely  to  invest  4  per  cent  of  the  annual  in- 
crement of  wealth  in  this  country  to  take  back  from  your  Govern- 
ment the  strongest  security  on  the  face  of  God's  earth,  and  to  re- 
ceive in  return  for  it  3|  per  cent  per  annum,  exempted  from  all  taxa- 
tion, with  the  further  provision  that  if  the  Government  issues  any 


8  THE   LIBERTY   LOAN. 

other  bonds  during  the  period  of  this  war  at  a  higher  rate  of  in- 
terest than  3|  per  cent  every  man  Avho  has  bought  a  3^  per  cent  bond 
may  turn  it  in  and  get  a  new  bond  at  the  highex  rate  of  interest. 
Couki  anything  be  fairer  than  that?  Could  anything  be  more  secure 
than  an  obligation  of  your  Government,  an  obligation  backed  not 
alone  by  the  honor  of  the  American  people — Avhich  of  itself  is  suffi- 
cient— but  backed  also  by  the  resources  of  the  richest  nation  in  the 
world,  a  nation  whose  aggregate  Avealth  to-day  is  tAvo  hundred  and 
fifty  billions  of  dollars;  so  that  you  take  no  risk,  my  friends,  in  buy- 
these  bonds. 

THE  FIKST  DUTY  OF  EVERY  MAN  AND  WOMAN. 

This  bond  offering  is  not  going  to  be  successful  of  its  awn  mo- 
mentum. Every  man  and  woman  in  this  country  must  realize  that 
the  first  duty  they  can  perform  for  their  country  is  to  take  some  of 
these  bonds.  Those  who  are  not  able  to  take  some  of  these  bonds 
ought  to  begin  saving  monthly  to  take  some  of  them ;  and  if  they 
can  not  save  monthly,  or  at  all,  they  ought  to  make  some  man  or 
some  woman  who  is  able  to  take  some  of  these  bonds  subscribe.  If 
you  do  that,  my  friends,  this  first  issue  of  $2,000,000,000  will  be 
largely  oversubscribed.  It  depends,  however,  upon  you.  Your 
Government  can  not  do  what  you  can  do  for  your  Go^i  emment.  A 
government  is  not  worth  a  continental  unless  it  has  the  support  of  the 
people  of  the  countr^^  And  one  thing  that  makes  me  glad — I  ought 
not  to  be  glad  that  there  is  a  war — but  I  can  not  help  feeling  a  certain 
amomit  of  reverent  elation  that  God  has  called  us  to  this  great  duty, 
not  alone  to  vindicate  the  ideals  that  inspire  us  but  also  because  it 
has,  for  the  time  being,  eliminated  detestable  partisanism  from  our 
national  life  and  made  us  one  solid  people.  As  one  people,  my 
friends,  with  such  an  ideal,  the  Republic  is  invincible  and  irresisti- 
ble, and  there  can  be  no  doubt  whatever  of  the  outcome.  I  want  you 
to  give  a  thunderous  reply  on  the  1.5th  of  June — Liberty  bond  sub- 
scription day — to  the  enemies  of  your  country, 

I  like  to  think  of  the  young  manhood  of  America  registering  in 
legions  on  the  5th  of  June  in  response  to  their  country's  call.  I 
hate  to  think  that  I  am  a  part  of  the  old  manhood  of  America,  be- 
cause they  will  not  have  me  in  the  Army;  I  would  rather  be  in  the 
Army  or  Navy,  where  I  could  help  strike  a  physical  blow  for  this 
noble  cause  than  be  talking  for  bond  issues  any  day  of  the  year. 
But  we  can  not  all  serve  in  the  field ;  we  have  got  to  serve  where  we 
are  called,  and  that  is  one  of  the  splendid  things  about  this  draft 
system.  It  is  the  very  essence  of  democracy.  It  does  not  penalize 
the  first  patriots  who  abandon  occupations  in  which  they  can  serve 
their  country  with  greater  benefit  and  go  to  the  front,  where  they 
can  do  less  good,  but  it  says  that  a  discriminating  and  just  govern- 
ment, through  its  duly  authorized  agencies,  will  find  out  who 
are  eligible  for  military  service  and  will  determine  Avhere  every  man 
ought  to  be  placed,  so  that  in  whatever  task  is  assigned  to  him  he 
can  render  the  maximum  of  service  to  his  country.  Let  us  make  a 
thunderous  response  on  the  5th  of  June — draft-registration  day — by 
recording  the  millions  of  freemen  who  are  willing  to  fight  for  world 
democracy,  and  then  let  us  on  the  14th  day  of  June  go  out  and 
worship  that  flag  which  means  liberty  and  protection  for  us  alL 


THE  LroERTY   LOAN.  9 

Let  US  get  down  on  our  knees  on  the  14th  day  of  June,  Flag  Day, 
and  thank  (iod  that  the  Stars  and  Stripes  arc  again  leading  for 
humanity  and  liberty  tliroiigliout  tl.c  world.  Then,  on  tlie  next  day, 
June  15,  let  us  all  send  in  our  subsc-ription,  so  that  this,  great  Lil>erty 
loan  will  be  five  billions  or  ten  billions  in  subscriptions  instead  of 
two  as  notice  to  the  enemies  of  the  United  States  that  they  had  better 
pause  and  think  whether  or  not  it  isn't  better  to  stop  this  shedding 
of  blood  and  furtlicr  expenditure  of  treasure  than  to  have  to  fight 
this  organized  and  invincible  Republic. 

WAR  TAX^VTION. 

My  friends,  there  are  several  things  which  have  to  l)c  done  in 
addition  to  selling  bonds.  T  should  like  to  exph'.in  to  you  for  a 
moment  that  nothing  could  be  more  unsound  than  to  attempt  to 
finance  this  war  by  bonds  alone.  I  have  no  sj^mpathy  with  the  argu- 
ment that  we  ought  to  pass  this  burden  along  to  succeeding  gener- 
ations. I  have  sympathy  witli  the  ;irgument  that  we  ought  to  pass 
a  part  of  this  burden  along  to  succeeding  generations,  but  not  all  of 
it.  Succeeding  generations  did  not  put  us  in  this  war;  they  have 
had  no  voice  in  this  decision.  Not  only  that,  but  liberty  is  just  as 
dear  to  us  here  as  it  will  be  to  succeeding  generations,  and  if  we  want 
it  for  ourselves,  and  if  we  want  to  transmit  it  to  posterity,  we  must  do 
the  things  now  that  are  necessary  to  preserve  it.  We  must  have  tax- 
ation as  well  as  bond  issues.  In  the  first  place,  if  we  had  bond  issues 
alone  we  would  have  a  period  of  dangerous  inflation  which  would 
react,  upon  the  termination  of  the  war,  disastrously  upon  our  pros- 
l)e^it3^  There  are  many  bankers  here,  and  I  know  that  they  under- 
stand full  well  the  dangers  of  inflation.  Business  men  understand 
it,  too.  We  must,  of  course,  have  a  certain  amount  of  wholesome 
inflation  to  carry  on  tliis  war.  That  is  inseparable  from  the  situ- 
ation :  it  is  an  essential  thing  to  have,  and  I  do  not  decry  it.  Perhaps 
I  ought  to  say  not  wholesome  inflation  but  wholesome  expansion. 
We  must  keep  credit  in  this  country  easy.  We  must  see  that  our 
great  prosperity  is  properly  financed:  and  while  we  are  doing  that 
we  must  keep  interest  rates  down,  so  that  business  may  prosper  and 
prwiuction  lie  keyed  up  to  the  limit,  because  with  tlie  great  demands 
that  are  goitig  to  be  made  upon  our  resources  by  our  Government  and 
by  the  allied  Governments  during  the  next  year  it  will  require  the 
utmost  energy  and  industry  on  the  part  of  every  American  citizen  in 
every  line  of  endeavor  to  produce  the  things  that  are  needed  to  win 
this  war. 

And  so.  while  that  must  be  done,  we  must  also  applj'  a  reasonable 
measure  of  taxation.  It  is  the  best  corrective  for  the  inflationary 
tendencies  which  grow  out  of  large  bond  issues.  We  shall  probably 
have  to  finance  in  the  next  12  months  something  like  $10,000,000,000. 
The  total  amount  of  new  taxes  propo.sed  in  this  revenue  bill  is  only 
$1,800,000,000,  or  18  per  cent  of  the  total  financing  we  shall  probably 
have  to  do.  It  doesn't  make  any  dilTerence  that  we  shall  get  back 
from  the  powers  bonds  for  a  large  part  of  these  expenditures.  We 
have  got  to  finance  it  all — their  needs  as  well  as  ours — in  this  country. 
The  money  is  going  to  stay  here,  that  is  verA'  true,  but  18  per  cent  of 
the  total  of  $10,000,000,000, 1  must  tell  you.  fellow  citizens,  is  the  least 
possible  amount  that  ought  to  be  raised  by  taxation  if  we  undertake 


10  THE   LIBEETY   LOAN. 

to  finance  this  war  conservatively  and  soundly.  Never  was  there  a 
nation  so  able  to  bear  that  tax  burden  as  the  American  Nation,  and 
never  was  there  a  time  when  the  American  people  were  more  willing 
to  make  the  essential  sacrifices  to  meet  the  situation. 

ECONOMY  AND  THRIFT. 

Not  onl}^  is  it  necessary  to  correct  inflationary  tendencies,  but  a 
certain  measure  of  wholesome  taxation  is  absolutely  essential  to 
encourage  economy  and  thrift  in  this  countr3^  When  I  say  economy, 
I  do  not  mean  a  lot  of  hysterical  self-denial,  the  refusal  to  satisfy 
the  ordinary  needs  of  ourselves  and  our  families,  the  normal  needs, 
during  this  time  of  war.  We  do  not  have  to  cut  off  our  normal  needs. 
What  we  do  need  to  do  is  to  prevent  waste,  to  stop  extravagance,  and 
to  give  up  luxuries  for  the  period  of  this  war.  Unless  we  have  a 
certain  measure  of  wholesome  taxation  to  make  men  realize  the 
necessit}'^  for  saving  and  for  the  prevention  of  waste,  we  are  not 
going  to  effect  those  necessary  savings.  Reasonable  taxation  is  'in 
every  direction  a  beneficial  measure  in  time  of  war. 

Why  are  savings  necessary?.  They  are  i;ecessary,  first  of  all,  be- 
cause waste  is  a  crime  against  civilization  at  this  time;  secondly, 
because  everything  we  save  makes  us  more  able  to  respond  to  the 
demands  of  our  country  for  the  necessary  finances  to  conduct  this 
war  and  to  pay  the  proportion  of  taxes  that  must  be  imposed  for 
that  purpose;  and,  thirdl}',  because  everything  we  save,  everything 
that  every  man,  Avoman,  and  child  in  the  United  States  can  save 
in  the  way  of  food,  in  the  way  of  clothing,  in  the  way  of  any  other 
of  the  essential  things  of  life,  is  just  that  much  less  demand  upon 
the  general  store  of  the  country.  I  want  you  to  think  of  this  situa- 
tion for  the  moment  as  one  big  general  store,  with  Uncle  Sam  as 
proprietor.  Uncle  Sam  has  got  to  see  that  his  own  people  are  fed 
jind  taken  care  of ;  he  has  got  to  see,  in  addition,  that  the  1,000,000 
men,  perhaps  1,500,000  men,  whom  we  are  going  to  put  into  the  field 
are  fed  and  clothed  and  equipped  with  the  things  that  are  necessary 
to  enable  them  to  become  trained  soldiers.  These  men  will  be  taken 
out  of  the  fields  of  productive  enterprise.  They  Avill  be  for  the 
time  they  arc  in  the  war  idle  men  from  an  economic  standpoint. 
They  have  got  to  be  fed  and  clothed  and  equipped.  That  means 
an  enormous  drain  upon  the  general  store  that  we  have  not  hereto- 
fore had,  and  imless  we_economize  and  prevent  waste  it  is  a  very 
serious  question  whether  we  shall  be  able  to  produce  enough  to  meet 
nil  of  our  demands  and  the  demands  of  the  rest  of  the  Avorld.  Every- 
thing that  we  save  is  going  to  release  that  much  in  the  general  store 
for  the  support  of  our  own  armies  and  the  armies  of  Europe.  It  is 
therefore  most  important,  my  friends,  that  that  should  be  done; 
and  I  Avant  to  urge  you  all  to  practice  that  kind  of  economy  Avhich, 
Avhile  not  restricting  legitimate  business,  because  that  is  unnecessary, 
Avill  prevent  valuable  food  and  other  things  from  being  thrown  into 
the  scrap  heap,  literally  Avasted  and  rendered  valueless  to  cA'erj'body. 

LIFE  AND  PROPERTY. 

Wars  involve  sacrifices,  as  I  said  before.  I  have  heard  some  grum- 
bling about  taxes.  I  have  sympathy  always  with  the  feeling  that  we 
ought  not  to  haA-e  new  burdens  put  upon  us.     I  don't  want  to  put 


THE    LIBEBTY    LOAN.  11 

burdens  upon  anybody,  and  I  certainly  do  not  want,  where  additional 

burdens  must  be  imposed,  to  have  them  unjustly  or  \in fairly  distrib- 
uted. These  new  taxes  ou«^h(  to  be  equitably  inipostMl.  Tlie  ditliculty 
about  it  is  that  everybody  has  f^ot  ;i  diftereMt  idea  about  ecpiity. 
Every  man  has  his  own  notion  about  equity;  arul  I  find,  as  ji  rule, 
that  his  notion  about  equity  is  very  much  distorted  when  his  own 
interest  is  affected.  That  is  human  luiture,  and  I  am  not  criticizing 
human  nature.  The  num  who  does  not  reckon  with  human  nature  had 
better  f|uit  trying  to  do  business.  You  have  got  to  realize  that  fact. 
The  point  I  want  to  make,  fellow  citizens,  is  tliis:  We  liave  got  to 
stand  these  burdens  and  make  these  sacrifices.  1  want  to  draw  a  con- 
tra.st  for  you.  Vou  have  just  i^assed  this  draft  bill.  You  liave  said 
to  the  young  men  of  the  country  between  21  and  .^0  years  of  age',''  VVc 
take  you;  we  take  your  life;  you  must  die  if  necessary  to  protect  the 
I^ropertv  and  the  liberties  of  the  people  who  do  not  go  upon  the  field 
of  battle" — you  men  who  stay  here  at  home,  my  sons  and  your  .«ons 
must  go.  I  have  three  sons  who  ha\e  already  voliuitecred  for  the 
Navy;  thank  God,  they  said  they  were  willing  to  serve  their  country; 
and,  as  I  said  in  St.  Paul  on  Saturday,  I  would  not  confess  that  I  had 
three  sons  if  they  did  not  have  the  spirit  of  America  in  them.  We 
send  our  sons,  my  friends,  out  to  fight  to  ])rotect  yo\\  and  your  prop- 
erty. Now,  because  we  are  stingy  about  taxation,  or  because  we  quibble 
about  how  the  money  shall  be  raised,  are  we  going  to  let  our  sons  go 
to  the  front  ill  equipped,  improperly  armed,  so  that  they  can  not  sell 
theii*  lives^as  dearly  as  possible,  so  that  they  can  not  make  their  lives 
count  for  all  that  their  blood  and  spirit  are  worth?  I  don't  believe 
that  there  is  a  corporal's  guard  of  men  in  America  who  will  quibble 
about  taxation,  who  are  unwilling  to  give  more  freely  of  their  prop- 
erty than  of  the  blood  of  their  citizens.  Shall  we  be  more  tender 
with  our  dollars  than  we  are  with  the  lives  of  our  sons? 

I  want  to  ask  you  men  here  to-day,  because  you  are  the  men  who 
form  public  opinion  in  this  countr}^,  to  get  behind  your  Govern- 
ment and  help  wake  up  the  people  to  the  necessity  for  making  these 
sacrifices  of  property  as  well  as  these  sacrifices  of  blood,  because 
after  all  it  is  perfectly  useless  to  expend  the  blood  of  our  sons  upon 
the  field  of  battle  unless  we  support  them  at  home*.  Not  only  that, 
my  friends,  but  I  want  you  to  think  of  this:  All  the  sacrifices  of 
treasure  that  we  may  make  to  gain  a  victory — and  we  are  going  to 
gain  that  victory  no  matter  what  the  sacrifice  may  be — will  be  in- 
finitesimal compared  with  the  sacrifices  that  every  man  of  property 
m  this  country  will  have  to  make  if  Germany  wins  this  war  and 
plants  the  iron  heel  of  conqueror  upon  our  shores.  You  may  think 
that  I  am  speaking  extravagantly  when  I  say  that,  but  I  am  not, 
my  friendvS.  Some  wit  or  philosopher  said  that  the  best  friends  of 
the  United  States  were  the  Atlantic  and  Pacific  Oceans.  Do  you 
realize  that  that  time  has  gone  by?  The  Atlantic  Ocean  to-day, 
under  the  conditions  of  modern  warfare,  isn't  anything  than  a  3- 
mile  wide  stream.  It  has  been  crossed  by  submarines  already.  Can- 
adian manufacturers,  I  am  told,  have  sent  submarines  to  Europe,  of 
which  you  have  never  heard.  German}'^  has  sent  her  submarines 
over  here.  Only  last  summer  a  German  submarine  came  into  one  of 
our  harbors,  and,  after  going  out,  sank  a  lot  of  merchantmen  off  the 
New  England  coast.     Suppose  Germany  wins  this  war.     She  can 

451G7.'J 


12  THE   LIBERTY   LOAN. 

only  will  it  by  overpowering  France  and  England.  If  she  does,  and 
gets  possession  of  the  British  fleet  and  the  French  fleet,  combines 
these  Avith  her  own  strong  fleet  and  Avitli  her  great  fleet  of  sub- 
marines, do  you  think  it  likely  or  unlikely  that  she  can  make  it  very 
iiiicomfortable  for  the  people  of  the  United  States?  She  will  make 
it  very  uncomfortable,  and  the  amount  of  indemnity  that  you  will 
have  to  pay  will  be  thousands  of  times  greater  than  any  amount  you 
Avill  have  to  raise  now  by  taxation  to  carry  this  war  to  a  successful 
issue.  So,  my  friends,  let  us  not  quibble  about  these  questions  of 
property ;  let  us  not  be  more  gentle  with  propert}'  than  we  are  Avith 
the  lives  of  our  citizens;  let  us  strive  earnestly,  diligentl}',  loyally, 
and  patriotically  to  equitably  diffuse  these  burdens  of  taxation,  be- 
cause I:  am  just  jas  much  opposed  to  making  any  one  class  fight  for 
my  liberty  as  I  am  to  fighting  alone  for  everybody  else's  libert3%  but 
let  us  pay  the  necessary  taxes.  Let  us  all  try  to  secure  an  equitable 
distribution  of  the  burdens  of  taxation,  but  let  us  not  be  OA^erj-e- 
fined  about  it,  nor  oversensitive  as  between  classes,  because — leTrne 
take  you  into  my  confidence — I  have  learned  this  after  four  years  in 
the  Treasury  Department — although  I  do  not  make  the  revenue  bills ; 
the  Congress  makes  them — you  will  never  get  a  perfectly  equitable 
tax  measure.  So  let  us  not  waste  time  over  that.  Let  us  as  true 
patriots  put  up  the  price  and  win  the  war. 

PRICE  EEGULATION. 

Along  with  these  problems  you  have  another  thing  to  consider  in 
this  war:  You  haA-e  got  to  consider  the  question  of  essential  price 
regulation.  The  GoA^ernment  may  have  to  regulate  prices  during 
this  emergency.  If  it  does  it  is  purely  an  emergency  measure.  The 
Government  in  the  regulation  of  prices  must  see  that  a  remunerative 
return  is  given  to  every  producer,  and  that  is  Avhat  the  object  of  the 
Government  is  going  to  be.  It  is  going  to  be  to  protect  the  producer, 
and  after  he  has  been  given  a  reasonable  profit  we  are  going  to  try  to 
see  to  it  that  the  consumer  does  not  pay  an  abnormal  difference  be- 
tween the  cost  of  production  and  the  selling  price.  These  measures 
do  not  smack  of  democracy;  in  themseh^es  they  are  opposed  to  the 
ideal  of  democracy.  But  wdienever  Avar  comes  to  a  democracy  it  is 
necessary  to  shuffle  off  the  clothes  of  democracy  to  some  extent  and 
to  organize  and  consolidate  the  poAver  in  the  President,  so  that  it 
may  be  effectively  exercised  for  the  benefit  of  the  Nation.  That  is  Avhat 
Ave  are  trying  to  /lo.  We  must  at  the  same  time,  in  the  purchases 
that  the  Government  must  make  from  our  industries,  from  our-inines, 
from  our  farms,  from  every  other  source  of  production,  not  attempt 
to  take  products  at  cost.  The  Government  must  pay  a  fair  profit  to 
the  producer.  It  is  not  unreasonable  to  ask  the  producer  to  sell  to 
the  Government  at  a  fair  profit  for  the  benefit  of  the  people  of  the 
countiy,  but  it  is  unfair  to  ask  the  producer  to  sell  at  cost.  So  that 
we  have  got  to  see  that  a  nice  equipoise  between  all  of  these  essential 
economic  factors  is  maintained. 

While  I  Avould  not  suggest  to  any  man  in  this  country  that  Avhole- 
some  and  legitimate  criticism  of  public  officials  be  prevented,  I  Avould 
suggest  that  Ave  try  to  offer  helpful  and  constructive  criticism.  Let 
us  not  merely  carp  and  find  fault.  I  Avould  not  hold  an  office  for  one 
second  if  I  felt  that  the  gag  Avas  put  upon  the  people  of  the  United 


THE    LIBERTY    LOAN.  13 

States  SO  tliiit  they  could  not  tell  me  when  I  was  going  wrong.  I 
want  the'ni  to  criticize.  I  never  get  n  chance  to  read  or  hear  any  tiling 
else  but  criticism.  I  tell  3'ou,  my  friends,  criticism,  however  unfair — 
and  there  isn't  a  country  on  earth  wliere  criticism  is  so  unfair  as  in 
America — is  v  holesome.  I  prefer  any  kind  of  criticism  to  none,  be- 
cause it  keeps  a  fellow's  feet  on  the  ^-ound,  and  if  he  has  any  tend- 
ency to  "swell  up,"  it  will  ]>revcnt  him  from  "busting"  in  short 
order. 

"  A  SCRAP  OF  PAPER." 

A  week  ago  a  patriotic  citizen  of  the  United  States  came  into  my 
office,  and  said,  "Give  me  a  pad  and  pencil."  1  picked  up  a  piece 
of  paper,  a  "  scrap  of  paper  "  that  was  on  my'  desk,  and  handed  it 
to  him.  With  a  lead  pencil  he  wi-ote:  "I  hereb}'  subscribe  for 
$5,000,000  of  the  Liberty  Loan  of  1U17,  and  I  agree  to  pay  for  it 
whenever  called  upon  by  the  Secretary  of  the  Treasury  to  do  so," 
and  signed  his  name,  (lentlemen,  that  was  a  thrilling  incident  to 
me,  because  there  was  the  answer  of  the  Amei'ican  people  to  (ier- 
many's  declaration  that  a  sacred  (obligation  is  no  move  than  a  "scrap 
of  paper."  We  answer  it  with  another  "  scrap  of  paper."  Upon  that 
"scrap  of  paper"  was  expressed  the  spirit  and  determination  of 
America  that  the  billions  of  dollars  of  resources  of  this  Nation  w'ould 
be  expended,  if  necessary,  to  vindicate  the  principles  of  liberty,  jus- 
tice, and  hunumity  throughout  the  world. 

Fellow  citizens,  you  all  know  that  the  security  of  modern  civiliza- 
tion rests  upon  the  inviolability  of  treaty  obligations.  You  know 
that  when  Germany  tore  up  the  Belgian  treaty,  a  treaty  to  Avhich 
she  was  a  party,  when  she  had  given  her  solemn  pledge  that  she 
would  respect  the  integrity  of  Belgium,  she  struck  a  mortal  blow  to 
civilization,  she  struck  a  mortal  bloAV  to  the'securit}^  and  the  peace 
of  the  world  for  the  future,  if  she  can  vindicate  that  doctrine.  Her 
excuse  for  it  Was  not  the  excuse  of  the  German  people,  but  the  excuse 
of  the  German  autocracy,  that  national  necessity  justified  the  breach 
of  a  sacred  contract,  not  alone  with  Belgium,  but  with  her  copowers 
in  that  solemn  obligation.  We  can  not  allow  that  principle  to  prevail 
in  this  world.  We  have  got  to  make  it  clear,  my  friends,  no  matter 
what  the  cost,  that  the  obligations  of  nations  are  more  sacred  than  tho 
obligations  of  individuals,  that^the  rights  of  the  smallest  nations 
upon  the  face  of  the  earth  are  just  as  sacred  and  must  have  the  same 
respect  as  the  rights  of  the  largest  nations ! 

o 


y 


UNIVERSITY  OF  CALIFORNIA,  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 

This  book  is  DUE  on  the  last  date  stamped  below 


JUN2  51951 


Form  L-9 

2.- m -2. '13(5203) 


tJNrsrK'<SiTY  ol  CALIFORNIA 

AT 

LCS  ANGMJIS 

LIBRARY 


KJ 

3117       M^Adoo.-  Tiie 

Mil  1 l.ijart.y  1oi;-., 


R  LYON 


HJ 
8117 
Mil   1 


IJC  <;OUTHf  RN  RFGirifJAl   I  IRHARV  FAm  ITV 


mill    III    III  liliiliii  I  III   ii||i||iii|i|ii    liiiiMi 

AA    000  847  035    3 


